Internaional Accounting Essay Example | Topics and Well Written Essays - 1500 words

Internaional Accounting - Essay Example Russia borders on the Arctic Ocean, the North Pacific Ocean, and Europe. The neighbouring countries are China, North Korea, Finland, Georgia, etc. (Russia: Introduction n.pag.). It is an independent economy having a budget expenditure of around $372 billion and the unemployment rate being 6.6% (Russia: Statistics n.pag.). In the year of 1990, the economy changed itself from being a centrally planned to that of a free market economy (Russia: Economy n.pag.). FINANCIAL ENVIRONMENT IN RUSSIA\ According to Vladimir Putin, the Prime Minister of the Russian Federation, Russia has been ranked among the top five economies for alluring foreign direct investment (FDI) (Doing Business in Russia n.pag.). The country has shown a good figure in terms of GDP (Gross Domestic Product) in 2011 where the Government debt was around 10% of GDP and the inflation rate being 6%. The Government is also planning to invest around $1.5 trillion for developing the country’s economy for the upcoming three years. However, the figure of FDI has not grown substantially as it is just accounting to an amount nearly $40 billion coming to the third year. And that means there are not many multinationals or foreign companies investing in the country (Doing Business in Russia n.pag.). BUSINESS ENVIRONMENT For doing business in Russia, there are certain accounting principles that one needs to follow. Each and every registered company or firm is required to prepare individual RAS financial statements for each financial year ending on the 31st of December. The framing of the financial statements are prescribed by the Ministry of Finance, and it includes a two-year’ comparative balance sheet, profit and loss accounts, a statement for equity changes, and a one-year’s comparative cash-flow statement. Supplementary notes are also required (Financial Reporting Framework in Russia n.pag.). Various international organizations like the World Bank and IMF are giving their supporting hand to the Russian Federation in order to improve the GDP rate. According to a study by the World Bank, the following data has been figured out (World Bank n.pag.). Figure one. Graph showing the growth of GDP over the years in comparison with Europe & Central Asia: Source: World Bank Here we can see that in Russia, the growth of GDP was very low in 2003 and gradually became somewhat consistent over the years of 2006 and 2007. There were no production in 2009, but it came to a considerable position in 2010 and 2011. According to IMF, this has also been found that Russia has been the largest borrower. Hence IMF is examining what Russia, in return, has produced or improved before sanctioning any more funds (Russia: The IMF’s biggest failure n.pag.). LEGAL ENVIRONMENT Taking the legal environment into consideration, if a person gets engaged into a tax or commercials dispute in Russia, according to the Court of Law, he/she will have to approach the arbitrazh courts. The procedure starts with filling in a form, and the whole procedure, in original, takes around 9 to 12 months to get completed. There are also some business regulations that are practiced in Russia which are the competition policy and the policy of price controlling (Business Environment in Russia n.pag.). Russia adopted the Civil Law for its jurisdiction in order to compete with the Western-European nation states by strengthening political and economic power (The Common Law and Civil Law Traditions n.pag.). Investor protection and